Ilyce Glink Show Notes – July 4, 2010
This Week’s Economic News Highlights
It appears we’re on the precipice of a double-dip recession and some economists are getting increasingly pessimistic about the sustainability of the housing market with unemployment so high. A spate of extremely negative economic reports didn’t help matters much. Here’s what happened this week:
The stock market fell 4.5 percent, to finish the week at 9686. It is now down about 12 percent from the high and it was the worst quarter since the first quarter of 2009. No good news here.
The unemployment report showed that about 83,000 private sector jobs were created, far less than expected. But 125,000 jobs were lost, including many temporary Census jobs. Hiring is anemic and job creation all but nonexistent. Nearly 700,000 Americans threw up their hands and gave up on the job market, which is the only reason why the “official” unemployment rate fell to 9.5 percent. If they had stuck around, the unemployment rate would have been 10 percent. Also, if you look at the U-6, which many consider to be the true picture of unemployment, it was at nearly 17 percent.
The Pew Research Center released a report this week showing that roughly 55 percent of Americans had lower income now (either because of job loss, forced furloughs or pay cuts) than before the Great Recession. That’s a horrible number and it helps explain why …
Consumer confidence levels plummeted this week, showing a 20 percent drop. It could have something to do with …
Pending home sales dropped 30 percent in May, or about twice as much as expected. I’m expecting a further drop in June. It’s now clear to everyone that the government’s life support of the real estate industry was critical, and that it didn’t do much to stimulate organic demand for houses – of which there is very little. We’ve been talking about this on the show for the last 8 weeks, since the mortgage bankers announced in mid-May that interest in purchase mortgages dropped 40 percent. Expect to see further drops here.
On Thursday, former Federal Reserve Chair Alan Greenspan said the recovery had hit an “invisible wall.” I think that the wall isn’t that invisible. If we continue to have nearly 20 percent true unemployment in this country, that wall will be in our way for many years to come. It’s also why …
Robert Prechter, author of the Elliot Wave Theory, thinks the Dow Jones could plummet all the way to 1,000. The New York Times did a great write up of his current thinking in today’s Business section, but essentially, he believes we’re in the worst depression in 300 years and thinks that when the 30-somethings grow up and have grandchildren, they’ll be telling them to swear off stocks. Crazy stuff. But, a good story and it’s worth noting that Ralph Acampora, whom the NY Times talked to in order to balance the story, also thinks stocks are going to dive in the next few months before rebounding.
Personally, I’m still in cash. Sam has been buying in at the dips. But I think if you’re in cash, there will be good buying opportunities ahead – but it won’t be for the faint of heart.
Thanks to Mike Rose, Wells Fargo, for joining us for most of the second and (special) third hours of the show.
We had great information on financing and refinancing in this difficult market. What’s clear is that refinancing isn’t for everyone.
Mike starts his new job at Wells Fargo as a mortgage consultant on Tuesday (July 6, 2010). If you want to reach him, call him on his cell phone: 404-934-7444. If he can help you refinance your mortgage, he will.
Meet The Financial Planners From Our Spring “How To Invest Your Money in 2010” Event
We’ve updated our RealWorldSeminars.com site to get ready for the next event, our Fall Real Estate Investing Event. We also updated the page where the financial planners who spoke at the Investing event are listed.
Each of them has offered to provide you with a free one-hour consultation in order to help you figure out where you want to go with your investing and I encourage you to call and tell them you got their name and number from me. You may decide to invest money with some/all of them, but at least you’ll be much more educated – which is what the best financial planners want.
Be sure to sign up for my FREE WEEKLY NEWSLETTER. In July, we’ll announce that the ticket window for the Fall 2010 How To Invest in Foreclosures and Other Investment Real Estate event has opened. Those of you who have been to these events know that the best ticket price is the first one we announce, and seats will be limited.
And while most of the day will be devoted to investing in real estate, the “After Hours” session from 3:30 to 5p will be an update on the stock market and investing in equities. You won’t want to miss this day.
Want to know what other folks think?
Introducing the Equifax Personal Finance Blog
On the blog, you’ll find great information about the five pillars of personal finance:
Tax (written by Eva Rosenberg, an enrolled agent)
Insurance (written by Linda Rey, who is president of her family’s insurance company)
Retirement/Investing (written by Dan Solin, see above)
Credit (written by Equifax’s own credit experts)
Real Estate (written by yours truly)
The blog is a great resource of information and ideas on how to save money, better manage your credit and make smarter decisions with your money. Check it out, RSS it, bookmark the page, and follow all of us on Twitter.com/EquifaxPFB.
Here’s what we’re talking about on the Equifax Personal Finance Blog this week.
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SPECIAL OFFER FOR REAL ESTATE AGENTS AND BROKERS
If you buy 350 copies of my new book, Buy, Close, Move In!, I will come and do a free half-day training sessions for your agents or a book talk and signing for your clients. (Travel expenses to locations outside of Chicago or Atlanta are not included in this offer).
Giving away this book to your customers not only will be one of the best lead generation tools you can use, it tells your buyers you’re interested in educating them so they have an exceptional experience buying their next property.
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